A charitable incorporated organisation (CIO) is a legal structure designed specifically for charities in England and Wales. Introduced by the Charities Act 2011, the CIO gives a charity its own legal personality and offers its trustees limited liability, without the need to register as a company at Companies House.
Why the CIO Was Created
Before CIOs were available, charities that wanted limited liability and a separate legal identity had to incorporate as charitable companies (companies limited by guarantee with charitable status). This meant dual regulation by both Companies House and the Charity Commission, with two sets of accounts, two filing deadlines and two regulators to satisfy.
The CIO removes this burden. A CIO is registered only with the Charity Commission and is subject to charity law alone.
Key Features
| Feature | CIO |
|---|---|
| Legal personality | Yes, separate from its members and trustees |
| Limited liability | Trustees and members are not personally liable for the CIO’s debts |
| Regulator | Charity Commission only |
| Companies House registration | Not required |
| Minimum trustees | One (but three or more recommended) |
| Members | Must have at least one member |
| Constitutional document | CIO constitution (not articles of association) |
Two Models of CIO
The Charity Commission offers two constitutional models:
Foundation Model
- Trustees are the only members of the CIO
- Simpler governance with no separate membership body
- Suitable for charities where a small group of trustees manages everything
- Decisions are made by the trustee board
Association Model
- Wider membership beyond the trustees
- Members have voting rights on key decisions (e.g. appointing trustees, amending the constitution)
- Suitable for charities with a broader community of supporters, volunteers or beneficiaries
- Trustees are accountable to the membership
| Feature | Foundation Model | Association Model |
|---|---|---|
| Members | Trustees only | Trustees plus external members |
| Member voting | Trustees vote | All members vote |
| Accountability | Self-governing board | Board accountable to members |
| Suitable for | Small, trustee-led charities | Membership-based organisations |
Forming a CIO
To set up a CIO, the founders must apply to the Charity Commission (not Companies House). The application requires:
- CIO constitution based on the foundation or association model
- Details of the charity’s purposes (must be exclusively charitable)
- Names and details of the initial trustees (minimum one, recommended three)
- Declaration by the trustees confirming the information is correct
- Public benefit statement explaining how the charity will benefit the public
The Charity Commission typically takes 30 to 45 working days to process a CIO application, though complex cases may take longer.
The CIO’s purposes must fall within the descriptions of charitable purposes in s.3 of the Charities Act 2011, such as the prevention of poverty, advancement of education, health, the arts, amateur sport, human rights or environmental protection.
Accounting and Reporting
CIO accounting requirements depend on the charity’s gross income.
| Income Threshold | Accounts Requirement | Filing Requirement |
|---|---|---|
| Under £25,000 | Receipts and payments accounts | No accounts filed (but annual return to Charity Commission) |
| £25,000 to £250,000 | Receipts and payments or accruals accounts | File with Charity Commission |
| £250,000 to £1 million | Accruals accounts (Charities SORP) | File with Charity Commission |
| Over £1 million | Accruals accounts (Charities SORP) with audit | File with Charity Commission |
Every CIO must also submit an annual return to the Charity Commission within 10 months of the end of its financial year, covering financial information, trustee details and activities.
Independent Examination vs Audit
| Gross Income | Requirement |
|---|---|
| Under £25,000 | No scrutiny required (but recommended) |
| £25,000 to £1 million | Independent examination |
| Over £1 million | Full statutory audit by a registered auditor |
CIO vs Other Structures
CIO vs Charitable Company
| Feature | CIO | Charitable Company |
|---|---|---|
| Regulator | Charity Commission only | Charity Commission and Companies House |
| Filing | One set of accounts | Two sets of accounts |
| Limited liability | Yes | Yes |
| Legal personality | Yes | Yes |
| Governance document | CIO constitution | Articles of association and memorandum |
| Formation | Charity Commission | Companies House then Charity Commission |
CIO vs Community Interest Company
A community interest company (CIC) is a limited company with a social purpose but is not a charity. CICs cannot claim charity tax reliefs (such as Gift Aid). A CIO is a registered charity and benefits from mandatory rate relief on business rates, exemption from corporation tax on charitable income and the ability to reclaim tax on donations through Gift Aid.
CIO vs Unincorporated Charity
An unincorporated charity (such as a charitable trust or unincorporated association) does not have its own legal personality. Contracts must be entered into by the trustees personally, and trustees may have unlimited personal liability. A CIO solves both problems.
Choosing the Right Structure
A CIO is typically the best choice for a new charity that needs to enter into contracts, employ staff or hold property in its own name while benefiting from limited liability and dealing with one regulator. For organisations pursuing social purposes that are not exclusively charitable, a community interest company or another business structure may be more appropriate.
Converting to a CIO
An existing charitable company or unincorporated charity can convert to a CIO by passing the required resolutions, applying to the Charity Commission with a CIO constitution, transferring assets and (for charitable companies) striking off the old company at Companies House.